A good SR&ED consultant can help maximize your refund and defend a claim that is under review. Consultants can help you pull together all of the documents you need to support a claim with the Canada Revenue Agency (CRA) as well. However, different SR&ED consulting firms offer different levels of service, so it’s crucial you do a bit of research and ask questions when you seek a consultant’s help.
Here are some things to look for and ask when procuring the services of a consultant:
1. Who Will Prepare the Claim? Are They Experienced?
Chances are, the senior employee you will speak with at a larger consulting firm will not be the one to write your claim. Your claim may be handed off to a junior representative with less experience, or may even be outsourced. If that’s the case, you’ll need to follow-up by asking what kinds of quality assurance processes the firm has in place. Plus, you’ll also have to know the senior executive’s level of involvement and, overall, if they provide the type of service that you seek.
Accounting firms will have at least two consultants preparing your claim: one to do the technical writing and one to handle the financials. You may never meet the person doing the calculations, and that person may not even be an SR&ED specialist. This accountant will not be able to judge the value of your claim as they will not fully understand what your technology is trying to do. This can cost you money in refunds. The writer, on the other hand, may be outsourced to someone living in another country and could be paid next to nothing for the work. Ask as many questions as you can and find out who it is that will be preparing your claim.
Be careful, too, if your work is sent out to freelancers. A freelance writer may not be involved with your claim once it has been submitted to the CRA. You do not want your claim to be treated carelessly and handled by too many people.
Also, ask the consultant who will be preparing the claim, if you can, about the latest ruling in the Tax Court of Canada and ask them to talk about this in relation to existing practices at the CRA. (You can also review the program and come up with some of your own questions as well.) Find out how many claims the consultant has successfully submitted and how many times they have successfully defended their claims when they came up for an audit. You’ll need someone competent and experienced to help you defend the claim they have written, should the need arise.
2. How are Claims Processed?
Ask your consultant or group to take you through an SR&ED claim preparation process and tell you what to expect. Be sure to have a conversation about what will happen if there’s an audit. Will they help you with your claim during that stage, or will you have to defend yourself on your own?
Additionally, check their written work for evidence of inattention and errors. Remember, mistakes caused by inattention can leave you thousands of dollars short on your SR&ED refund. Be ruthless in terms of who you hire. It matters.
3. Can They Provide Client References?
You should be able to get client referrals from your consultant. However, be sure to look up online reviews, client testimonials, and case studies. Your industry peers may have worked with the consultant before and may be able to give you some valuable feedback. Call and ask around, and if you have issues, discuss them with your consultant or group. In the end, go with your gut.
Keep Asking Questions
Make sure you are comfortable with the process and have all your questions answered. For additional questions, we recommend reading “Why I hate SR&ED Consultants (Even Though I Am One).”
There is a myriad of things to look for when choosing a good consultant or group. It is beneficial to do thorough research for yourself and know who it is you want to hire and why. It could mean the difference between a small and a large refund.